If you’re looking for insurance as your investment tool, choosing a money back policy is the best option.
Many of us want to invest in traditional life insurance plans for a long term for generating a guaranteed corpus. However, we face problems when we require money before such a term is over. This is where a savings plan such as money back policy can help you.
Money back policies
As you reach various stages in your life, there are several aspirations and dreams which you set forth for your family as well for yourself. However, this doesn’t relieve you from your everyday responsibilities related to managing your home, paying for school fees, health expenses, etc.
Hence, the money back policy is most suited to individuals who are risk-averse and wish to save and create wealth through an insurance option while maintaining liquidity throughout the policy term. In case of demise of the policyholder, the nominee receives the sum assured and survival benefits aren’t deducted.
Money back plan solves the problems related to liquidity during the policy term by paying a certain percentage of sum assured at regular intervals throughout the plan term. If you’re a young individual, this plan would help you regularly for your several financial needs like down payments for your home or a new vehicle, medical needs of your parents, children or self, educational needs of your children, loan pre-payments, funding the wedding of children, etc.
Money back plan being an endowment policy, the risk factor is always low and hence you don’t need to worry that your investment won’t yield good returns. Almost all the money back plans offer fixed and guaranteed returns, which would enable you to plan all your finances well.
-Offers insurance coverage during the term of the policy.
-Pays regular benefits throughout policy term
-Twofold benefits: insurance policy and long-term investment with high returns.
-Income tax benefits
-Is relatively less risky as compared to investments in mutual funds.
-Regular income & long-term savings.
-Some of the best money back policies also offers optional riders which cover things such as critical illnesses, disabilities, specific illnesses, etc.
The bottom line
Owing to such benefits, money back plans are now among the most favoured investment alternatives amongst investors. Choosing between a money back plan and a term plan would totally depend upon your financial situation and personal needs. If you’re looking for insurance as your investment tool, choosing a money back policy is the best option.
Source: Tax Guru